Ch 6 HW

Ch 6 HW - Stephanie Chin Microeconomics Section 26001...

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Stephanie Chin Microeconomics Section 26001 Homework Ch. 6 1. The unit amount makes no difference in determining elasticity because economists use percents, not absolute amounts, so that they can correctly evaluate responsiveness. Using percents also allows for comparisons to be made between different products. 2. The price elasticity for each $1 change is 1 therefore we can conclude that this product is unit elastic. In the upper left part of the curve the original quantity is small and therefore the percentage change in quantity is large whereas in the lower right part of the demand curve the percentage change is small because the original reference quantity is large. 3. 4. Revenue a. If price falls and demand is inelastic revenue will decline b. If price rises and demand is elastic revenue will decline c. If price rises and supply is elastic revenue will increase d. If price rises and supply is inelastic will decrease e. If price rises and demand is inelastic revenue will increase f. If price falls and demand is elastic revenue will increase 0 1 2 3 4 5 6 1 2 3 4 5 Quantity Demanded 0 2 4 6 8 10 1 2 3 4 5 Quantity Demanded
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g. If price falls and demand is of unit elasticity revenue will remain
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Ch 6 HW - Stephanie Chin Microeconomics Section 26001...

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